If SaaS companies are serious about customer success, they better learn from Coupa's community intelligence approach

When I asked SaaS vendors about their customer success programs in 2019, they all had some type of happy answer: programs are underway; resources are committed.

But when I asked about taking aggregate data from SaaS customers and offering that back in the form of peer benchmarks, I heard a lot of pauses - and not much by way of examples.

When I asked, "Have you considered taking that benchmark data and embedding it in the software so that customers can get tips and benchmarks in real-time?" I got one of two answers. Usually, it was a flat-out no. Other times:

That would be a great idea.

Well, other enterprise software vendors might want to step up their game, because business spend management vendor Coupa is charging ahead here. At Coupa Inspire 2019, I didn't just hear talk about "Community Intelligence" - which, frankly, is a great-sounding phrase that can mean almost anything.

I also heard multiple customers talking about how this impacts their day to day, sharing screen shots and sample data. Since Coupa Inspire, I've gone back-and-forth with the Coupa team on Community Intelligence - customer stories are ready to share.

Community intelligence - the push for a "Waze" of spend management

Coupa started talking up "Community Intelligence" two years ago, via a press release in May 2017. The stated ambition?

Apply Artificial Intelligence across $360B+ in spend under management to create prescriptive insights for customer competitive advantage.

That same year, our own Stuart Lauchlan quoted Coupa CEO Rob Bernshteyn:

One of the incredible outcomes of having hundreds of billions of dollars in transactional spend and accelerating is the power of community intelligence that we are now beginning to bring to the marketplace. [This is] the ability to look across all the data sets in real-time and provide insight to each individual customers.

It sounded useful at the time, though perhaps a bit lofty. To bring this concept down to earth, Bernshteyn (pictured above) uses the GPS Waze app as an example. As he told Lauchlan: 

I liken it to the way many of us use Waze to navigate through traffic using community intelligence to do the most optimal thing as it pertains to spend, and we are in the very early innings of that.

Fast forward two years and change, and Coupa isn't in the early innings anymore. They've productized their Community-Powered Intelligence concepts; Bernshteyn has authored a book, Welcome to the Community Revolution. They've even managed to "gamify" some aspects of the offering, via "tortoise" and "hare" graphics that show customers how they stack up against their peers.

Customers share views on embedded benchmarking

But as you know by now, until we hear it from customers directly, it's all a grain of salt at diginomica. At Coupa Inspire, I got the first hand show and tell. First up? Wade Lyons from Teleperformance, who took part in a "Next Generation of AI & Big Data: Community Intelligence" presentation. Lyons told the audience how Coupa's embedded metrics work:

If you're not using the Coupa metrics today, you should really look into that; it's just part of the platform. If you go into your dashboards and benchmarks, you'll see this type of data... So if you look at your electronic fields down by order amount, you can see we're up 19.45%, and the leaders are at 86.23%. This is from the category of business services in the Coupa benchmarks.

Here is a look at a sample Coupa metrics dashboard:

Lyons says these type of metrics get buy-in from CFOs:

The power of this is: I can go in, and track - and I can go sit down with CFOs. At a regional committee meeting last week, I put this in front of our CFO and said, "Look, procurement doesn't have the tools and the ability to do this. We can show progress, but we've got to get people onboard like accounting."

Using Coupa's benchmarks, he could show his executives:

Expense approval cycles, invoice approval cycles, all those things can be impacted. Not by every user in the company, but by organizations like accounts payable - and we can improve those metrics.

From the metrics screen, you can drill into benchmarking specifics. Example: this screen on supplier health, which shows both an overperforming (green) and an underperforming (red) area:

In some cases, there could be perfectly good reasons why you underperform. But as Lyons points out, it's very helpful to know where your company's logjams are:

If we look at the expense approval cycle time, we know that it shows 3.07 days, and the leaders are .9. But we know why we're at three days, because we don't manage expense reports on a daily basis; we have somebody on our accounts payable team that looks at it every Wednesday... So we have a delayed time, but at least we understand what's behind that.

Of course, just like any report card, you're going to get some good grades - and some not so good grades. But as Lyons says, those can be motivating. And as you drill into Coupa, you'll see prescriptive ideas your peers have utilized. As he showed us:

It's quite interesting just to go in and take a look at it, and see what it can tell you. Here it says, "Electronic fields, and rank by order amount." If you click on that, it will say, "Hey, we've got two ideas to help you become more efficient here." Or, "We've got five ideas and actions you could take to reduce the cycle time." It will actually give you those recommendations.

Learning from your peers is always powerful. Baking that into your software takes it to another level:

Now we're talking about taking data, how we compare to the larger community, but in our specific environment, "What can we do to improve this?" That it's prescriptive data to us, telling us what actions we can take.

Gamifying competitive metrics - turning reports cards into motivation

I'm a certified gamification curmudgeon, if not outright cynic. But in this case, I like what Coupa has done with the tortoise and hare graphics. Obviously, procurement is not a game, but without a gamified feeling, some of these benchmarks could feel like a slap in the face. Lyons shared his view:

If you're a Coupa customer, when you go to approve something at the bottom, you'll see a tortoise or a hare. It'll tell you that you're ten hours slower; they can tell if you're your six hours faster.

Here's a screen with a tortoise (green) and hare (red) example:

Lyons says these graphics get attention:

I've actually had regional CFO's call me and say, "Wait, I don't know what this is but get rid of it. I know that I'm not 19 hours slower than the community. I know I'm not."

But frustration sparks improvement:

Here's the amazing thing about this: we're just looking at data here from November to May, you can see the decrease in our PO count. The amazing thing about this is that's just from November to May, we decreased our approval time [significantly].

Competitive motivation works:

It's almost subliminal... People see it, and it becomes, "I'm not going to be the tortoise, I'm going to be the hare." Right? We have sworn up and down by this. I literally have discussions with those people and say, "What do you care? You're the only guy that can see it. Nobody else sees this but you, so don't worry about it." But their performance is improving, right? They're either rejecting things more quickly, or they're approving things more quickly.

We heard more on the power of community benchmarks via Rick Quaintance. Senior Director, Procurement and Contract Management at USO, a non-profit dedicated to supporting military service members and families. During a presentation with Coupa's Charlene Wang, Director of Product Marketing, Quaintance spoke to the impact of peer-validated metrics. But they need to match your industry:

You can choose from a drop-down as to the type of organization. Of course, it shows non-profit and the period. Then you can actually put what you want your goal to be for that particular period. So that's where I've documented where I want us to get.

Not all metrics are equally relevant, but they are a valuable staring point:

Then I look at the leaders. Again, some of the leaders, it just depends on your business as to whether that's viable for your organization or now. But I definitely look for the field penetration. We now have over 90% of our requisitions that are PO-backed. For some organizations, there are going to be some non-PO backed invoices. But over 90 percent is a pretty good penetration.

These goals drive progress - and give users clarity they didn't have before.Quaintance:

It just creates those efficiencies for the invoices to be applied against a purchase order. We have a lot of requisitions that are project-driven. So we have multiple purchase orders against a requisition. This helps staff be able to manage their overall project budget.

Quaintance says some training was needed, but once users understood how these comparisons worked, they made a difference:

That's where it's important for training for the organization and staff on how they can use Coupa for their purposes - they can see how they stand.

The wrap - on data privacy, opt in, and what's next

During our analyst sessions at Coupa Inspire, the question of data privacy and opting in, or out, of a program like community intelligence was an important topic. I've also heard this from other SaaS vendors, who seem to feel that a hard stance on protecting privacy means benchmarks like this can't be tallied.

But, of course, plenty of SaaS vendors have solved this aspect, releasing anonymized, aggregate data - often in the form of industry reports. Where most vendors are not at Coupa's level is integrating this data back into the software, and using "AI" to provide prescriptive actions based on that data - not as an add-on SKU, but as part of the core software.

Coupa's team told me that they have 99+ percent participation in this community intelligence program. I also heard anecdotes of customers opting out, but opting back in once they realized the impact participation could have.

Any program of this kind must be rigorous on privacy. There must be opt-in/out guidelines that are transparent and amenable to their customers. I left Coupa Inspire believing Coupa takes this aspect seriously. Data sharing is about trust, and perceived value. Both have to balance out - but that's not a good excuse for sitting on valuable data that your customers can use either. At any rate, what Coupa has done here ranks somewhere in my top five most compelling enterprise software advances I saw in 2019. Not all of their customers have reached this point of benchmark usage, so I'll be looking forward to an update in 2020.

In 2020, I hope to speak to more vendors who have taken customer success metrics to another level. Another vendor with an interesting story here is Freshworks - see Refresh 2019 - Can Freshworks change the CX market with better customer success metrics? If you know of another I should be talking to, find me on LinkedIn or in the comments here.